ENA Economy 2016-10-03 07:30:17 <p><strong>Mumbai, Oct 3 (KNN)</strong> Highlighting the 56 per cent credit gap in the micro, small and medium enterprises sector (MSME) finance sector, RBI Deputy Governor S S Mundra has suggested the banks to employ smart technology and innovative credit scoring to meet the credit needs of the sector.</p> <p>Mundra said this while addressing the 3rd SBI Banking and Economics Conclave here recently.</p> <p>Mundra, pointed that the 12th Five Year Plan (2012-17) highlighted a credit gap of 56 per cent in the MSME (micro, small and medium enterprises) finance sector in India.</p> <p>In absolute terms, this translates to approximately Rs. 16 trillion which is roughly 25 % of the total bank credit.</p> <p>The outstanding credit to the MSE sector of all scheduled commercial banks as on March 31, 2016 has shown a declining trend, he said.</p> <p>The apex bank deputy governor said that RBI, in co-ordination with the Government of India and other stake holders has initiated several measures to enhance flow of credit to the sector.</p> <p>Banks need to employ smart technology and innovative credit scoring to meet the credit needs to especially the micro and small segment a large % of which are outside the formal financial system. In the process, however, the banks must guard against creating over indebtedness in the sector, he added.</p> <p>In his concluding remarks at the conclave, the theme of which was Setting The Priorities Right, Mundra said, Cyber Risk/Frauds/Mis-selling/ Market misconduct have the potential to bring down a financial institution as recent events have shown. Banks need to do value accretive and value based financing</p> <p>I would like to end with a Chinese proverb which says, The best time to plant a tree was 20 years ago and the second best time is now. The sector would do well not to miss planting trees at the second best time, he concluded. <strong>(KNN Bureau)</strong></p> 15526 http://knnindia.co.in/news/newsdetails/economy/banks-must-employ-smart-technology-innovative-credit-scoring-to-meet-credit-needs-of-msmes-mundra 2016-10-03 07:30:17 knnindia.co.in